Despite the dismal outlook for companies like Jaguar, whose recent I Pace launch was met with not a little disappointment, 2019 is expected to see some stunning EV launches from the likes of Audi, Mercedes-Benz and Porsche.
Availability and mass production aside, the only thing we have now is promises of better-than-Tesla EVs from the world’s top carmakers. Jag’s perhaps hasty unveiling of the I Pace was a rude reminder that these rulers of the ICE market are still several years behind Tesla in their electric technologies.
But, finally, jolted awake by the roaring success of the Model 3, which finally and (hopefully) firmly put Tesla in the black, car manufacturers are smelling the coffee. And it hurts.
The interesting thing here is that most of these efforts resemble Tesla’s experience with the original Roadster. High-end, luxurious and pretty much out of reach of the average car buyer. Contrast that with the cheapest Model 3 and it’s clear that Tesla is achieving its objective of continually pushing prices downward.
Ironically, traditional auto makers who dissed Tesla’s efforts at the time are going the same route, but are trapped by the price ceiling that Tesla has set on sedans and crossover SUVs. The I Pace, for example, is priced at the Model S level. Many of the big-name EVs for 2019 will also be in that price range. Moreover, even at that price, they’re unable to provide the battery range that a Tesla EV can, as the I Pace clearly shows.
If you’re interested, here’s our coverage of potential and wannabe Tesla-killers of 2019…although they’re all far from truly earning that nickname.
The interesting thing is that many of the so-called rivals are all luxury models. Even if they can get them into production by next year, it’ll be another few years before they can establish battery supply chains for mass production, which will keep hobbling them in terms of pricing advantage. In short, they will have none.
Meanwhile, Tesla will keep pulling ahead of the pack with the acceleration of…well, a Model S P100D, if you will. And the star of the show will be the Model 3. Just like the Ford Model T more than a century ago.
Eventually, other auto makers caught up to Ford, as other EV makers will eventually catch up with Tesla. But there’s a key difference here. Henry Ford didn’t have the kind of huge technology advantage that Elon Musk does. He did, but certainly not to this extent because, unlike Tesla, Ford didn’t have an ace up its sleeve – the not-so-humble EV battery. And we’ve already covered that subject extensively.
Sure, Volkswagen and the gang will catch up to Tesla over the next decade or two because they have the resources, but the pioneering efforts of Musk and Tesla have already made it a $50 billion company, with estimated target prices as high as $4,000 a share. By the time the auto giants get to that point in the EV journey, who knows how big Tesla will be?
Companies like BMW and Daimler will probably choose to remain at the high end of the market, while Volkswagen, Nissan, GM and others have to prove their worth through improved range and reduced pricing, which is not easy to achieve when you haven’t achieved scale.
The point I’m trying to make with the luxury angle is that all these car makers will have to overcome consumer perception that their EV cars are more that just a luxury item. They have to prove their mettle on the road and in sales charts whether they’re retailing for $25,000 or $250,000. It’s the weirdest case of Catch 22 possible.
That hasn’t happened yet for them, but both have happened in a big way for Tesla. They have more than 200,000 cars on the road and their sales charts are on fire with conversions from reservations as well as new orders, and just one key market penetrated so far.
As such, the “luxury” tag is one that’s not going to be easy to shrug off down the road. It was a lot easier for Tesla because there was no one else on the playing field other than sub-100 and sub-200-mile-range cars from Nissan, Toyota and a few others. GM has now joined that, and others are threatening to. But it’s a long road, and Tesla is already a speck in the distance.